Impact of environmental performance and policy on firm environmental reputation

Abstract

PurposeThis study investigates the impact of corporate environmentalism on corporate environmental reputation. Corporate environmentalism comprises both environmental performance and environmental policy, thus distinguishing a firm's actual environmental performance from the intent of its environmental policy. The moderating effect of advertising is also investigated.Design/methodology/approachThe study derives four hypotheses from the literature and tests these by means of a Tobit model and a unique combination of databases.FindingsResults show a link between environmental policy and corporate environmental reputation, but not between environmental performance and corporate environmental reputation. Additionally, results reveal the moderating effect of advertising to be negative, suggesting that advertising contributes only marginally toward improving corporate environmental reputation.Originality/valueThis study is one of the first to investigate the complementary effect of environmental management, environmental policy and advertising on corporate reputation.